Contract Act of India 1872

According to the Contract Act of India 1872, if a person seeks to enter into a contract with another person without the use of coercion, fraud, misinterpretation, or undue influence. It goes on to say that a contract isn’t just about committing to something with the other party, but also about abstaining from something. When two or more people agree on the same item in the same sense, this is referred to as free consent. However, it is possible that the consent was not signed voluntarily by one of the parties, but was coerced to do so by the second party. It could be a Coercion contract in this scenario.If A threatens to harm B unless he sells his home to A for 5 lakh rupees. Even if B sells the house to A, the transaction will be void because B’s agreement was obtained through compulsion. It is not free consent if force or threats are used to get the permission of the party under compulsion. Section 15 of the Act states this. It is possible that if Party A exerts undue pressure on Party B to do something, the contract will not be a free consent contract. It is very typical in India for parents to exert undue pressure on their children to choose a specific job or career path. This is referred to as Undue Influence.

There is a fine line between fraud and misinterpretation. If a person suggests a truth that is not true and he does not believe it to be real, then according to section-17 of the act, if the person has concealed the facts or made a promise with no purpose of performing it or has any other such act suitable to deceive, then the contract is voidable. Misrepresentation also occurs when a party makes a false, inaccurate, or wrong representation. The distinction here is that the misrepresentation is unintentional.The person making the claim believes it to be true. Misrepresentation occurs when one party encourages the other party to make a mistake about the subject matter of the contract by suggesting a fact that is not true and believing it to be true. However, this is done inadvertently and not on purpose.

If any of these circumstances apply, the contract is voidable, which means that the person who is disadvantaged has the authority to decide whether or not to participate in the contract. If such permission was obtained through misrepresentation or silence, both of which are fraudulent under section 17, the contract is not voidable if the person whose consent was obtained had the means of learning the facts with ordinary diligence. Explanation.— A contract is not voidable because of fraud or misrepresentation that did not result in the consent to the contract of the party on whom the fraud was practised or to whom the misrepresentation was made.